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https://opened(dot)tesu(dot)edu/ethicalleadership2edition/chapter/4-1/
https://opened(dot)tesu(dot)edu/ethicalleadership2edition/chapter/4-23/
https://opened(dot)tesu(dot)edu/ethicalleadership2edition/chapter/4-24/
https://opened(dot)tesu(dot)edu/ethicalleadership2edition/chapter/4-25/
In this assignment, you will be examining how the application of moral frameworks can aid in overcoming barriers to ethical decision-making. In an essay of 600 to 800 words (2 to 3 pages), share your thoughts on the following prompts. Cite your sources using either MLA or APA Style.
Chapter 4.1 discusses common barriers to ethical decision-making. Please review this section and the Wells Fargo case study resources (4.23, 4.24, and 4.25).
Describe the potential barriers to ethical decision-making the leaders at Wells Fargo encountered. What are the barriers that you think influenced the decisions that led to the scandal? Were the barriers eventually able to be overcome? Use each of the four ethical frameworks discussed in the resources (deontology, consequentialism, virtue ethics, social contract theory) to analyze the case. How did the actions of the leaders align (or not align) with these frameworks? How do you think applying the key tenets of each of the frameworks might have influenced the decision-making process?
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Wells Fargo Scandal: Application of Ethical Frameworks
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Introduction
Ethical practices are inevitable for organizations to operate in a sustainable environment. Financial institutions like banks have significant value for ethical compliance due to business nature and industrial regulation. Wells Fargo is a reputed and recognized bank in the United States of America (US). The company led the New York Stock Exchange (NYSE) through its profitable portfolio. Besides, Wells Fargo received stakeholder appreciation for its robust business practices and industrial leadership (Markkula Centre, 2018). However, the company lost the recognition in September 2016. The company was accused of generating 2 million unauthorized accounts, resulting in $185 million penalization from the regulatory bodies (McCombs, 2018).
Discussion
Potential Barriers to Ethical Decision-Making at Wells Fargo
The case analysis suggests that Wells Fargo encountered various barriers in ethical decision-making. First, leaders at Wells Fargo were trapped in ‘bounded rationality,’ leading to nonprogrammed decisions. Leaders were pressured on quantitative performance and financial targets, which overlapped with ethical parameters (TESU & Alverson, 2018). Second, the ‘escalation of commitment’ was a fundamental barrier at Wells Fargo, preventing leaders from ethical compliance. Wells Fargo overlooked the decision-making feasibility and efficacy of managers since the company enjoyed financial returns. However, the series led to malpractice, resulting in ethical failure (TESU & Alverson, 2018). Lastly, ‘uncertainty’ is a leading challenge for Wells Fargo, causing scandals. Managers and leaders were reluctant to understand environmental changes and pursued performance while making decisions. As a result, ethical compliance became an opportunity cost for the bank (TESU & Alverson, 2018).
Nonetheless, the above analysis finds bounded rationality was a fundamental barrier that triggered the events of the scandal. Wells Fargo focused on improving stock prices on the NYSE and attracting more por...
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